WAR DEBTS

Press, Volume LXIX, Issue 20957, 11 September 1933, Page 5

WAR DEBTS

FEELING IN AMERICA ATTITUDE OF CONGRESS (I."» (By T.C.L.) American opinion is not greatly concerned over the comparative failure of the London Economic Conference. At the outset it was felt that the chances of any tangible benefits arising from it were not particularly bright, simply because of a divergence of fundamental views on the part of America and the Eur-pean countries. I; Britain, France and America could not find common ground on which to build the world's economic system anew it was thought there was little hope of the representatives of 66 countries sitting together in London doing so. Mr Ramsay Mac Donald had gone across to America to talk things over with President Roosevelt, but he soon found that America did not attach the same importance to war debts as did Britain and other European countries. Mr Mac Donald endeavoured to show that the stabilisation of the pound and the formulation of international policies concerning the complex questions of exchanges, tariffs and commercial relations were impossible until the tnter-governmental war debt situation was cleared up, also that European currencies could not be stable if they remained at the mercy of large transfer payments necessitated by the war debts. He stated, as leading American economists had already stated, that war debt payments could be settled only by goods, services or gold, and the world supply of gold being utterly inadequate for the purpose, America had either to accept an excess of imports over her own exports or cause a breakdown in payments. But America, naturally enough, had endeavoured to prevent an excess of imports in order to keep her own plants and people employed. The importation of more goods and products is the last thing desired by America to-day. She has her own unemployment problem, and it has been of a severity little realised by other nations. Possibly no other nation has -suffered from it more acutely than she has.

President Sympathetic. President Roosevelt was very cardial and sympathetic towards Mr Mac Donald, but insisted that the war debts question must be kept entirely separate from the other | questions of reduction of tariffi,. stabilisation of currencies, and reduction of armaments. The fact was that President Roosevelt, with his keen political sense and discernment, realised that Congress was not likely to support him in any measures he might recommend to settle the war debt question. There is reason to believe that personally he appreciates the inconsistency between the American high protective system and America's position as a great creditor nation, and realises as do the economists that European dobtors under present conditions simply cannot continue to make interest or amortisation payments. Congress, however, has yet to be convinced of the stern facts of the position. They have to answer for their actions to constituencies that are not particularly enlightened on the war debt question. The average elector only knows that Liberty Loans were raised to assist the Allies in the prosecution of the war ; and that the terms of the repayment and of interest were subsequently revised in accordance with the ability of each debtor to pay. Also if these payments are not maintained that he himself will have to shoulder the burden. Accordingly he has no sympathy with the suggestion that the debts should be forgiven. If they are forgiven, if Congress in its wisdom declares in favour of scaling down or cancellation, then he asks, " What about our own debts ? We owe billions of dollars on our farm and house mortgages, and if you can afford to relieve the Allies of their debt burdens, then you ought to relieve us of ours. Charity should begin at home." Intransigent Congress.

* Congressmen have this argument driven home to them in season and out of season, and, their foremast desire being to retain their seats, they assume a stiff, intransigent attitude at Washington when the war debts question is considered. The easiest way would be for the Alli»3 to repudiate. There is little doubt that they would be greatly relieved were Britain to repudiate and that they would derive from such an action not a little satisfaction, for to many of them Britain is still the proud and haughty and arrogant nation she was 150 years ago, when the War of Independence occurred. Besides, it is still good politics in some of the communities and in some of the States to bait and abuse the British. At the same time the commercial and financial communities fully appreciate the difficulties attending the transfer of money to meet the war debt payments, and they appreciate, too, the sincerity and honesty of Britain in trying to meet her obligations. They are in favour of reduction or cancellation, because they can see no other practicable way out, if international trade is to improve, indeed to survive. They would take action along these lines immediately, if but given the opportunity. Putting Their House in Order. But these elements do not control the political machine. Even President Roosevelt, as close as he is to Congress, and enjoying its fullest confidence in the way he does, feels it inadvisable to make the issue .-f v. ar debts a live or crucial one at ILe present tim?. He has other and more important fish to fry at the moment. He frankly states that it is more important to America to put its own house in order before concerning itself over world problems. And he is seeking to do this in a series of measures which are unprecedented, almost revolutionary, in character and scope. Until these measures are tried out it is unlikely that he will give consideration to the war debts question as it affects Britain. Meantime, his assurance that he regards the partial or token payment in June as not repudiation but as a payment on account and that he will be pleased to ] meet representatives of Britain and < other debtor countries and hear their i representations regarding future payments was thoroughly well re- ] ceived by every section in America, ' the feeling being that Britain was 1 doing her best in difficult circum- 1 stances to honour her obligations and 1 was therefore entitled to every con- 1 sideration. c c Hostility to France. i But a different attitude was taken 1 towards France, who had peremp- < torily notified her intention again 1 1

not to pay her instalments until the new situation created by the practical cancellation of the German indemnities was considered t«/ America. From the time of Lafayette, Americans have always had a warm spot in their hearts for France a republic like their own, but V? nch , behaviour over the war debts has entirely changed that feeling. You scarcely hear in America to-day a good word in * ranees favour. Their people are described „s " welshers," as devoid of honour and integrity, as belonging to a third-rate nation who are as selfish and greedy and self-centred as they can be. The Americans refer to the millions of dollars worth of goods America sold to them at the conclusion of the war, an ordinary business deal that was quite outside the sale of war munitions, on which, they contend, France should pay had she any regard for ordinary commercial morality. They also say that France's attitude at the London Economic Conference over the stabilisation of currencies was directed against the dollar and America's scheme for industrial recovery, and that she is the chief barrier to the reduction of armaments in Europe, a barrier that must be removed if ever the world is to be put again on the track of world economic recovery. But to others, to British people particularly, it is certain that no ecc-normc conference can succeed unless President Roosevelt obtains :rom Congress full authority to deal ,vith the debt as well as the tariff question. "Let the war debts ride for the aresent," say many Americans; ' they will take care of themselves," 3ut they fail to realise the effect of ;his laissez faire attitude upon Briain and the lest of the world, and hat delay in reaching a settlement >f the question in the light of :hanged conditions only retards the orces of reconstruction and stabilisaion that are endeavouring to find :xpression in a world of great ravail and perplexity.